The group risk market, providing group life, group income protection and group critical illness is a real success story, covering more people than ever before as employers seek truly valuable differentiators in the war for talent.
An additional 4.5% increase in employees covered and 3.8% increase in premiums means that at the end of 2016 we insured 12,029,790 people and £2.106bn in premiums. As an industry we are a massive success story having already added 800,000 employees in 2013/2014/2015 and in 2016 almost 520,000 new people have been covered: in a single year that is amazing! Surely we are the envy of every other financial services industry segment?
Our customers are employer purchasers or Trustees and employees in flexible/online benefits arrangements. It is clear that for those that we currently insure they clearly value what we do, otherwise why expand schemes with so many additional people? But we have an industry challenge. In essence, with only 72,841 organisational schemes in the market we have a massive job to do to attract more organisations to buy these products.
To put this in context , if we assume that the core benefit that an organisation would buy is a Registered Group Life/death benefit scheme, then there are only 43,471 of these in the market. As an industry, we have penetrated less than 8% of potential Group Life customers. While only 3% of employers have Group Income Protection (17,168) schemes and just over 0.5% have Group Critical Illness cover (3,311 schemes).
The most shocking area for me is that there are still only 17,168 employers with Group Income Protection. While the additional 57 new employers this year are welcomed, the first increase since 2008, this is simply woeful in an era when the State Disability benefit alternative has just shrunk by almost a third. Could you live off £3,801 per annum as an income i.e. the amount of benefit the State provides under the Employment and Support Allowance?
Am I happy? I should be on the face of it as I work in a thriving industry, valued by those who have our benefits. But we are possibly not known by many that have not considered them. Clearly we have a huge amount of work to do to increase customer understanding about the value and importance of Group Risk benefits, and HR Grapevine has been incredibly supportive in our endeavours, for which we thank them.
Paul Avis first joined Canada Life Group Insurance as a Sales and Marketing Director in 2009. He became Marketing Director in January 2013 in order to focus on proposition and market development initiatives. In an intermediated B2B marketing environment, the organisation is seen as a technical, thought leader in the complex arenas of employee health management and protection. Paul joined Canada Life from HR services organisation Ceridian, where he carried out the role of corporate development manager.